A competitive product at a competitive price: Canadian Solar USA GM Alan King on ELPS technology, global markets, and keeping ahead of the competition

Alan King

As General Manager of Canadian Solar USA, Alan King is spearheading the company’s commitment to one of the fastest-growing solar markets in the world.

Prior to joining Canadian Solar, Mr. King worked for almost a decade with Evergreen Solar, Inc. as the Americas Sales Director managing OEM and development and sales for distributors, dealers and the utility market. He was responsible for managing more than a billion dollars’ worth of long-term contracts with both domestic and international integrators and distributors. He also developed a channel marketing strategy leading to more than $100 million in sales.

Mr. King is actively involved as a member of the Solar Alliance and the Solar Energy Industries Association (SEIA). He was also a board member of the Solar Energy Business Association of New England (SEBANE). Mr. King has presented at a variety of trade shows and conferences, including Intersolar North America and the Distributed Solar Summit.

Solar Server: The first thing that I am curious about is your company's ELPS technology. Can you tell us a little about the ELPS cells and the metal wrap-through design? Specifically, how does this technology achieve higher conversion efficiencies, and what are its advantages over other technologies to increase crystalline silicon PV efficiencies?

Alan King: The ELPS technology uses P-type crystalline silicon with a metal wrap-through design. Through a combination of things, it enables us to increase our cell efficiency up to approximately 19.5% for mono and about 18% for poly. Of course, each cell varies a little bit, certainly.

Which translates to roughly about a 1.5% to 2% lower for actual panel efficiency. The way the metalization is done on the surface of the cell, as well as putting the busbar on the back of the cell, rather than the front of the cell, allows more of the actual cell to absorb light. As is typical with any cell technology, the less coverage that you have on the cell surface the more light that the cell is able to absorb, the more photons that are knocked loose, and the more electricity you are able to generate from the individual cells.

The way that our design works, is that it enables us, by being in essence a back-contact cell, to put most of the metalization on the back of the cell, therefore freeing up more of the front of the cell to absorb light.

Solar Server: Compared to other back-contact cells, what are the specific advantages of ELPS of the ELPS design?

Alan King: It actually enables us to somewhat lower our production cost, because the busbar on the front side is eliminated, which reduces our silver paste usage. The increased efficiency in conjunction with our lower cost manufacturing give us a lower cost of goods, which should translate into a very competitive market price.

I think probably the biggest advantage of the ELPS cells is the increased efficiency and lowering the material costs, enabling us to be far more competitive in price than most back-contact cells on the market today.

Solar Server: To go over to market, I note that the vast majority of Canadian Solar sales come from the European market. The first quarter of 2011 was a very difficult time for many PV manufacturers, yet Canadian Solar only had a 2% drop in revenues from the fourth quarter of 2010 to the first quarter of 2011. How did you do it?

Alan King: Well, first of all we have a very solid team in Europe in our key marketplaces, that has developed very strong relationships with our customers, and we have done so by delivering a quality product with proven performance in a timely manner at a competitive price.

And frankly, I think we have been more in tune with market pricing and the trends in the market than many of our competitors, which has enabled us to respond pro-actively rather than reactively to market prices, and enabled us to hold something of a higher average selling price, and to be able to secure projects, larger projects, that enabled us to sell out our production.

There's nothing magical about it, it's just hard work, knowing your marketplace and having good sales force in place that has solid relationships with its customers.

Solar Server: What do you see for the future of European markets and Canadian Solar's presence in European markets?

Alan King: It is difficult to see what is ultimately going to happen, but we do know that the days of double and triple digit increases in the European marketplace are probably going to come to a close, that market will stabilize.

And by stabilize, I mean there are a variety of numbers being presented from a low of about 3 GW in Germany, back to a high of about 7 or 8 GW in Germany. So it really depends upon which consultant or which analyst you decide you want to listen to.

We see the market settling in and remaining fairly stable. Next year we’ll probably see small double-digit increases, year over year, and the real growth shifting to other markets such as India and the United States.

Solar Server: Can you talk about Canadian Solar's plans to expand in North America, both Canada and the United States?

Alan King: We have had a presence in the U.S. and Canadian markets for a while now; we have been in the U.S. market for over three years. We have developed some strong partners in that marketplace. But we really haven't focused on it, in part due to the fact that, in particular, last year the European market was so hot and had such a demand for products that frankly we could have sold every panel that we manufactured in Europe, and then some, probably well beyond our annual production capacity of 800 MW at the time.

So we didn't focus on the U.S. marketplace as much as perhaps we would have liked to. By the way, we have high expectations for the U.S. marketplace, as do most of our competitors. But our anticipation is that we will utilize a multi-segmented market strategy that enables us to develop specific tools to serve each market segment.

We believe that the U.S. marketplace will segment into three market segments: the utility-scale market, the middle market which is really the large commercial, and by large commercial I mean somewhere in the neighborhood of 500 kW up to 4MW, or wherever it becomes utility scale, and also residential and small commercial, which will probably peak at around 1 MW.

We have a strategy in place that we believe will allow us to adequately serve all three segments of those markets. We've done some significant analysis in these markets, and we are currently developing a series of tools that we will launch later this year, going into the new year, which we believe will be able to serve the market, not only from a financial perspective but also from a product perspective.

And of course the ELPS product is one of those products that we have developed for the U.S. marketplace, and the global marketplace, but we believe that it will have particular importance for the residential market in the United States, because of its higher efficiencies.

Solar Server: Canadian Solar has recently invested heavily in joint venture projects to build both wafer and cell capacity in China. Can you talk about Canadian Solar's experience with these collaborations, and the significance of these projects for the future of your company?

Alan King: We have high hopes for the joint ventures, we believe that it will allow us to produce a very competitive wafer and cell, and add to our overall capabilities, and we believe that as part of our strategy, having some flexibility of how we acquire our goods, our materials, is critical as well.

Rather than either outsourcing all of the cells or wafers that we buy, as opposed to manufacturing it in-house, we believe that a flexible strategy is perhaps the most important, because it allows us to take advantage of the variances in the marketplace, and one would hope, always be on the right side of the price curve.

Solar Server: Is there anything we haven't covered that you think is important for our readers to know about Canadian Solar?

Alan King: It's important to know that Canadian Solar is a top five manufacturer of solar panels, our anticipated production this year will be 1.5 GW of solar panels, we also have a 2 GW module capacity, but we will only be producing 1.5 GW this year.

We have eight different offices in different parts of the world. We are virtually a fully vertically integrated manufacturer: with the exception of silicon we manufacture our wafers, cells and modules, and we have been able to grow in a very short period of time. 2006 was really when we first came into the marketplace, and in five, going on six years we’ve gone from a startup to a 1.5 billion dollar company.

We are also committed to offering differentiated products, and to that end in addition to the ELPS product we are looking at a variety of different offerings we can take to the global marketplace that will include power electronics, different types of products, different form factors of products. We are committed to research and development and we are committed to innovation, as we believe that by doing so we will be able to differentiate ourselves in what is becoming an increasingly commoditized solar market.

I think what's important to recognize is that Canadian Solar has been on a significant upward trajectory, in terms of its growth not only in terms of volume but also of revenue, and we feel that we are uniquely positioned to continue that level of growth, and to take advantage of our strategy, if you will, our varying strategy on cost of goods and materials.

Solar Server: One more quick question. You talk about the vertical integration of Canadian Solar. In your mind, what is the greatest advantage of vertical integration, is it cost reduction, is it quality control, or is it something else?

Alan King: I think all of those factors come into play. But let's be real, in a marketplace that is becoming, as I said earlier, increasingly commoditized, vertical integration gives us a much greater ability to control our costs. So to me, the ability to control your costs ranks as perhaps the most important criteria for vertical integration.

But keep in mind that if you don't have a quality product, if you don't have excellent production capabilities, if you can't deliver on time, it really doesn't matter what your price is.

So you have to wrap a competitive manufacturing cost around customer intimacy, around the ability to deliver a competitive product at a competitive price and deliver it in a timely fashion. It does you no good to be the lowest priced guy on the block if you can't deliver the product to the project in a timely fashion.

So, while I think that one of the main aspects of vertical integration is that it does allow you to control costs better, you still have to have all of the other factors to be considered a world class company, which I believe Canadian Solar is.

Conducted on June 28th, 2011 by Solar Server International Correspondent Christian Roselund